MCX Natural Gas under fresh selling; Support seen at 181
Commodity Online | September 12 2019
UPDATED 09:30:57 IST

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Technically Natural Gas market is under fresh selling as market has witnessed gain in open interest by 1.51% to settled at 9784 while prices down 3.4 rupees.

Now MCX Natural Gas is getting support at 181 and below same could see a test of 178.5 levels, and resistance is now likely to be seen at 187, a move above could see prices testing 190.5.

Natural Gas on MCX settled down 1.82% at 183.5 on profit booking after prices gained on forecasts for warmer weather and rising cooling demand over the next two weeks. The U.S. National Weather Service forecast temperatures would remain above normal over the eastern half of the country over the next 15 days.

With the weather expected to remain warm, data provider Refinitiv projected demand in the Lower 48 U.S. states would rise to 86.9 billion cubic feet per day (bcfd) next week from 86.2 bcfd this week as power generators burn more fuel to keep air conditioners humming.

Exports to Mexico, meanwhile, eased to 5.0 bcfd on Monday from an average of 5.2 bcfd last week, according to Refinitiv, as the market continued to wait for the startup of the 2.6-bcfd Valley Crossing and Sur de Texas-Tuxpan pipes after TC Energy Corp and Sempra Energy's IENOVA unit resolved pipeline contract disputes with Mexico's Federal Electricity Comission in late August.

Utilities likely added 82 billion cubic feet (bcf) of gas into storage during the week ended Sept. 6.That compares with an injection of 68 bcf during the same week last year and a five-year (2014-18) average build of 73 bcf for the period. The amount of gas in inventory has remained below the five-year average since September 2017. It fell as low as 33% below that average in March 2019. But with production expected to keep growing from a record high.

Trading Ideas:
--Natural Gas trading range for the day is 178.5-190.5.
--Natural Gas dropped on profit booking after prices gained on forecasts for warmer weather and rising cooling demand over the next two weeks.
--The U.S. National Weather Service forecast temperatures would remain above normal over the eastern half of the country over the next 15 days.
--Utilities likely added 82 billion cubic feet (bcf) of gas into storage during the week ended Sept. 6.

Courtesy: Kedia Commodities

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